Opening Statement of Chairman Heath P. Tarbert Before the April 22 Agricultural Advisory Committee Meeting

April 22, 2020

I am humbled to be the sponsor of the Agricultural Advisory Committee. The members of this committee and the industry groups that you are a part of have mobilized and risen to the challenge of feeding the nation during this COVID-19 (coronavirus) pandemic.  During these unprecedented times, agriculture plays an essential and critical role in addressing our country’s most basic needs. I realize a lot of you and your members are struggling, but I want to say thank you on behalf of the CFTC for the important work you are doing. It is truly an honor to know you.

Agriculture is essential to the fundamental needs of everyone around the world, and we are reminded of that now more than ever.  If the derivatives markets are not working for the American agriculture sector, then in my view they are simply not working. Many agricultural producers and end users rely on these markets to mitigate and hedge risk.  Given the unique circumstances we are facing because of COVID-19, it is important to me that we have this meeting to discuss what we are seeing, to hear from you, and to answer any questions you have.

Our job at the CFTC is to ensure that the derivatives markets are doing their job of providing opportunities for end users to manage and mitigate risk.  Even though we are physically separated due to social distancing, the agency’s commitment to our critical mission is stronger than ever.

In recent weeks, the CFTC has established a livestock markets task force that is monitoring in real time contracts such as Live Cattle, Feeder Cattle, and Lean Hogs.  Our market analysts are watching for any indication that prices are moving in an uneconomic manner relative to the underlying commodity’s cash prices.  Specifically, we are monitoring to see if, for example, traders are attempting to manipulate futures prices through disruptions caused by supply and demand shocks.

It also brings me great excitement to announce that we will soon appoint a CFTC Liaison to the U.S. Department of Agriculture for the first time in our 45 years of existence.  The original Commodity Exchange Act requires that the USDA appoint a liaison officer for purposes of maintaining a connection between the USDA and the CFTC.  Reciprocating with our own liaison will ensure robust dialogue and continued coordination regarding matters of mutual interest.

I want to especially thank Agriculture Secretary Sonny Perdue for being a part of this meeting.  He and the Department of Agriculture are on the front lines of the nation’s response to the coronavirus pandemic.  Given the extraordinary times we are facing, I cannot think of anyone more qualified or better equipped to lead the Department.  Our partnership with the USDA is critical to our work here at the CFTC, and we are grateful to the Secretary and USDA staff for the insight and knowledge they continue to bring to our discussions.

I would also like to recognize a number of other individuals who have helped make today’s meeting possible.  First, I extend my thanks to my fellow Commissioners for participating.  I would also like to thank Derek Sammann from the CME Group and David Farrell from ICE Futures US. Finally, we are fortunate to have with us today Rob Johansson, the Chief Economist for the USDA, as well as a number of members of the CFTC’s Division of Market Oversight.

-CFTC-